Home » Who is the better inflation hedge tool?JPMorgan Chase: Institutions are shifting from gold to Bitcoin provider Zhitong Finance

Who is the better inflation hedge tool?JPMorgan Chase: Institutions are shifting from gold to Bitcoin provider Zhitong Finance

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© Reuters.

Author: Yujing

Zhitong Finance App learned that earlier this year, when it fell by more than half from the all-time high of $63,000 on April 15, Nikolaos Panigirtzoglou, a cross-asset strategist at JPMorgan Chase, believed that investors should sell bitcoin. He told institutional clients , Bitcoin’s upward momentum has faded, and the only reasonable direction is downward.

But when Bitcoin soared this Wednesday, the price once again exceeded 55,000 US dollars, while the total market value exceeded 1 trillion US dollars, and the total market value of the crypto market exceeded 2.3 trillion US dollars, Panigirtzoglou’s views changed 180 degrees. The report states, “The increase in the price of Bitcoin is a healthy development because it is more likely to reflect the involvement of institutions in the cryptocurrency market than other cryptocurrencies with a smaller market value.”

The analyst said in a previous report that institutional investors “are pouring in and withdrawing.”

Panigirtzoglou mentioned this mistake in his latest report. He wrote: “In most of August and September, we have argued that our position proxy based on CME futures shows that institutional investors have a strong interest in Ethereum and Bitcoin. Bitcoin’s strong preference. But as shown in Figure 16, this preference seems to have reversed since the end of September, and Bitcoin’s position agency has rebounded sharply.”

“This rebound at least partially reflects the short covering shown in Figure 17, which describes the clearing of Bitcoin futures on all futures exchanges. As can be seen from Figure 17, in the past one or two weeks, Bitcoin The liquidation volume of short futures appears to have increased.”

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Panigirtzoglou pointed out, “Institutional investors believe that Bitcoin may be a better hedge against inflation than gold.”

The analyst also listed some other reasons for the increase in the price of Bitcoin:

1) U.S. policymakers have recently assured that they have no intention to follow other countries’ measures to prohibit the use or mining of cryptocurrencies;

2) The adoption of Bitcoin in El Salvador;

3) Investors’ concerns about inflation have reappeared, which has renewed their interest in Bitcoin as an inflation hedging tool; Bitcoin’s attractiveness as an inflation hedging tool may have been enhanced because gold prices have failed to counter inflation in recent weeks Respond to increased concerns, acting more like a product that reflects real interest rates than an inflation hedging tool.

4) The price gap between actual gold and digital gold continues to widen. Bitcoin not only provides a reliable diversified investment tool for risky assets (compared to Bitcoin’s return on any other asset class), it also shows that it is more The strong correlation between soaring monthly inflation expectations is not like the sharp drop in gold this year.

JPMorgan Chase said, “Preliminary signs indicate that the shift from gold ETFs to Bitcoin, which occurred during most of the fourth quarter of 2020 and early 2021, has begun to reappear in recent weeks.”

If JP Morgan’s analysis is correct, Bitcoin is not only an acceptable inflation hedging tool (definitely better than gold), but also an asset that JP Morgan will promote to institutional clients, especially those holding 60/ One River’s CIO Eric Peters, a customer of 40 balanced portfolios, has long held a view that if even a small part of the global 60/40 portfolio is reconfigured as digital currency, then it will flow into cryptocurrencies such as Bitcoin. The potential funding of the currency will be very substantial.

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